Postal : Coming Clean

How to get the most impact from list hygiene

August 2008 By Jennifer Williams & Bill Singleton

multipage

The hygiene chart (shown above) shows the services just discussed and their expected rates of corrections applied to a national file of consumer households. Applying all of the services to 1 million records will cost about $5,900 and could fix a maximum of 16 percent. However, because some records will overlap between hygiene services, let's use 14 percent to see what impact this processing can have on using your most important marketing asset.

If you mail your 1 million mail pieces every month at a cost of $0.75 each and never apply these services to your file, you would waste many mail pieces. The waste would be the 14 percent of hygiene processing matches, or 140,000 mail pieces each mailing, and an additional 1.17 percent (14 percent divided by 12 months) each month as your file becomes less deliverable through unapplied hygiene factors. In a year, you would waste 2.6 million mail pieces and $1.9 million, a full 22 percent of your circulation and budget.

What if you applied the full range of services once at the start of the year and let your file age for the rest of the year? In this case, you still would be wasting 128,000 mail pieces and $577,000. Even with throwing away that many mail pieces, the improvement in your situation compared to doing nothing would be dramatic. By fixing accumulated address changes; do-not-mail requests; missing address elements; and deceased, prison and profanity suppressions, you would reduce your annual waste by $1.4 million for a cost of less than $6,000.

You would do better still to process your file with all the hygiene steps more often. If you scrub your file every six months, you would cut your waste from $1.9 million down to $262,000 for a processing cost of $12,000. This return on your processing investment looks wonderful until you recognize that having 117,000 mail pieces not reach the right people is still a situation calling for more attention. This analysis does not consider the extra responses and orders you could get by reaching more of your customers, which would only make the need to process more frequently even more compelling.

The outlook for your file's deliverability and potential to keep your customers happy improves as you increase your processing to four and then six times a year. You cut mail piece delivery losses from the original $1.9 million down to losses of only $105,000 and $52,000, respectively. Certainly, the savings of more than $1 million a year is desirable, but even these scenarios include nondelivery of your mail piece, and consequently your total sales will be less than optimal.

If you increase your processing to seven times a year, you near breakeven. At that point you are spending $40,000 on processing and losing just less than $44,000 in undelivered mail pieces. However, that still means that 58,000 customers are not getting your offers and will not order directly from your firm or be motivated to go to your Web site.

The only schedule that yields the maximum benefit to your mail deliverability is monthly processing. Remember, we saw that there were no savings in a completely unprocessed file. If you go to processing as frequently as the USPS can provide you with updates to the NCOA file and the third-party suppliers can give you updates on their apartment appends, COA+ and suppression files, you will incur no losses at all. You will have cut circulation waste from $1.9 million to zero at a cost of $70,000 in data hygiene.

A significant consequence of improving the cleanliness of your file is its preparation for further processing. The merge/purge matching logic will not work nearly as well as it can otherwise. If you compare your customer file to rented lists, you will not drop a rented prospect name in favor of mailing a customer name if you feed an out-of-date customer address to match a current prospect address. The benefits of a hygienic file clearly will include improved matching and savings on your list rental costs as well as the savings on wasted customer mailings alone.

Cleanliness Is Next to Deliverability
By focusing your attention and a small part of your marketing budget on the cleanliness and deliverability of your customer file, you will demonstrate how important your file is to your marketing efforts. And all of your efforts will be amply repaid by your customers when they see the results of your creative and data processing work. 

Jennifer Williams is a service manager of strategic accounts, and Bill Singleton is a manager in the analytical services group, both at The Allant Group in Naperville, Ill. Jennifer can be reached at (630) 579-2978 or jwilliams@allantgroup.com. Bill can be reached at (630) 579-3448 or bsingleton@allantgroup.com.

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